IMF Slashes Global Growth Forecasts

The recession is here, is about to be here, or has already been here for some time, according to the new IMF World Economic Outlook. The documents covers forecasts for 2012 and 2013.

According to the report, the agency's forecast for global growth was marked down to 3.3 percent this year and a still sluggish 3.6 percent in 2013. And

the IMF said advanced economies are projected to grow by 1.3 percent this year, compared with 1.6 percent last year and 3.0 percent in 2010, with public spending cutbacks and the still-weak financial system weighing on prospects.

Growth in emerging market and developing economies was marked down compared with forecasts in July and April to 5.3 percent, against 6.2 percent last year. Leading emerging markets such as China, India, Russia, and Brazil will all see slower growth. Growth in the volume of world trade is projected to slump to 3.2 percent this year from 5.8 percent last year and 12.6 percent in 2010.

As would be expected, the forecast for Europe is completely grim.Even Germany's GDP is expected to only improve by .9% this year and in 2013. For the entire Euroarea, the drop this year will be .4% followed by a .2% growth next year. In other words, it would take only the slightest of slowdowns from IMF forecasts for all of Europe to be in recession.

The weak Italian economy is expected to contract 2.3% this year and improve .7% in 2013

The forecasts for China are as weak as any issued by a major international organization. GDP improvement this year is expected to be only 7.8% followed by 8.2% next year, although it is hard to see how the People's Republic will make the numbers in light of the slowdown in the balance of the world.

The U.S. continues to be a bright light in many forecasts, which include this one. GDP is expected to rise 2.2% this year and 2.1% in 2013. Slow, yes, but better than the alternative.